What Russia calls NATO aggression, Wall Street calls growth. I noticed that the stock of the world's number three defense contractor, Northrop Grumman, climbed in trading Friday after Dick Cheney gave the Ukrainians some bold new assurances.* Northrop Grumman, for example, does not only merely make the weapons of war, it actually tries to define US national security requirements (see this post).

Back in early August, at least one Wall Street analysts had seen what was coming:

"No less than the Soviet invasion of Afghanistan in 1978, [the] events of the past several days are a bell-ringer for defense stocks," said Paul Nisbet, an analyst with JSA Research, an aerospace equity research firm. "We strongly urge purchase of aerospace/defense issues, a sector which has declined with the broad market since the start of the year."

__* Cause and effect? We have no way of knowing what actually caused NOC to rise in early trading Friday (see chart). Some defense industry stocks went down. Rather more clear to me is the observation that the long-term prospects for the US defense industry improve with the worsening of US-Russia relations. Companies like Northrop Grumman build a lot of Cold War-era weaponry; without an escalation in tensions between the US and Russia -- or China -- the future of their industry would not look so bright.